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Forecasts About the Future of Higher Education

Here is a 1997 quote from Peter Drucker, one of the leading gurus of business management during the past half century:

Thirty years from now the big university campuses will be relics. Universities won't survive. It's as large a change as when we first got the printed book. Do you realize that the cost of higher education has risen as fast as the cost of health care?

...

Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis.... Already we are beginning to deliver more lectures and classes off campus via satellite or two-way video at a fraction of the cost. The college won't survive as a residential institution (Lenzner & Johnson, 3/10/1997).

Peter Drucker was an Austrian-born American management consultant, educator, and author. His writings contributed to the philosophical and practical foundations of the modern business corporation. He introduced the concept of "knowledge worker" in his 1959 book: The Landmarks of Tomorrow.

Notice that he did not forecast the demise of higher education. He merely forecasts the demise of colleges as residential institutions.

Seventeen years of his predicted time frame have passed. During this time, college systems throughout the world have prospered. However, I recently read another future-of-colleges forecast in an article by futurist Thomas Frey: By 2030 Over 50% of Colleges Will Collapse. (Frey, 6/5/2013).

Frey looks at colleges as a type of business that has existed for a long time. Quoting from his article:

So what happens when the legacy power of an institution meets a rapidly changing business environment driven by emerging technology? Some will survive but many will not.

The “education industrial complex” is perhaps the most influential in the world, with everyone from Presidents and world leaders, to Nobel Laureates, to CEOs and business executives all unwavering in their support of colleges and their accomplishments. [Bold added for emphasis.]

Probably the term educational industrial complex reminds you of Dwight D. Eisenhower’s 1960 speech warning about the military industrial complex. Frey claims that we have been oversold in the value of and need for our current type of higher education. Both in the U.S. and in other nations, an increasing number of college graduates are ending up either unemployed or employed in jobs that do not require a college education.

Frey lists eight arguments to support his claim. Four that I find particularly compelling are:

  1. Overhead costs are too high. It costs a huge amount per year to maintain a campus. Distance education and MOOCs have a tremendous cost advantage over our campus-based college system.
  2. Substandard classes and teachers. Most institutions do not come close to meeting the content and presentation standards of the MOOCs. As the MOOCs and other forms of distance education get better and better, the average quality of such courses will far exceed the average quality of current on-campus courses.
  3. Inconvenience of time and place. Many students find that a college’s central location and course time schedule are inconvenient. Students from around the world want to take courses from the colleges around the world without having to travel.
  4. Pricing competition. Our current tuition system is forcing many students to look for less costly alternatives. Colleges with large endowments can offer large scholarships and tuition reimbursements, but most campuses lack such large endowments. Tuitions have gone up very rapidly in public colleges, because state legislatures are reducing the amount of financial support they are willing (or able) to provide.

Declining Enrollment

The demographics in the United States suggest that we are entering a time of declining college enrollment. Luke Juday’s article, The Demographics of Declining College Enrollment, focuses on Virginia. Quoting from his article (Juday,10/2/2014):

Despite a rise in high school graduation rates, college enrollment is dropping from its 2011 peak, leaving many small colleges scrambling.  Here in Virginia, enrollment has largely been steady, but two small colleges closed in the last two years, and others have sounded the alarm on declining enrollment or missed targeted growth.  Every struggling college certainly has its own history and unique problems.  But larger trends always pick off stragglers.  In Warren Buffet’s words, “when the tide goes out, you find out who’s been swimming naked.”  And the tide appears to be going out.  A rash of articles has addressed the subject, with some of the leading culprits being the improved economy and job prospects for those without degrees.

Return On Investment

Business people often measure the potential of an investment based on their estimated future income or profit from the investment. Consider a student thinking about attending a particular college. The student knows the costs of attending and the scholarship money the college is offering. It is then possible for the student to analyze the investment required to attend that particular college.

Joseph Weisman’s 4/15/2014 article, Which College Will Leave You the Poorest?, includes examples of colleges that provide a very low return on investment. Quoting from the article:

So as a policy nerd, to me the most interesting part of Payscale’s rankings isn’t the top of the list: It’s the bottom. The site finds almost two-dozen schools where the average graduate—not dropouts, mind you, but students who finish their degree—will probably lose money on their educations, because their earning power won’t increase enough to justify the cost of tuition. To be blunt, these schools make students poorer. And we’re talking about traditional colleges, not nefarious for-profits.

Some individual colleges do their own return on investment calculations and provide the results to perspective students. For example, see University of Wisconsin, Madison.

Underemployment

Alexandra Raphel’s article, Are Recent College Graduates Finding Good Jobs?, suggests that a 4-year college degree does not guarantee a good job (Raphel, 1/24/2014). Quoting from the article:

The underemployment rate of recent college graduates—defined as their working in a job that typically does not require a bachelor’s degree—increased from 34% in 2001 to approximately 44% in 2012.

For recent college graduates who are underemployed, the quality of their jobs has been declining since 2000. In the 1990s, about 50% of underemployed recent college graduates were in “good non-college jobs,” but this fell to 36% by 2009. (The authors define good non-college jobs as occupations such as electrician, dental hygienist or mechanic that do not require a bachelor’s degree but tend to be career oriented and well compensated.)

The last sentence quoted is particularly important. Joann Weiner’s article, Why Sally Can’t Get a Good Job with Her College Degree, expands on this topic (Weiner, 9/5/2014). Quoting from the article:

Wharton School professor Peter Capelli tried to figure out whether the problem in the labor market is because the jobs don’t require the skills that candidates are offering or because workers don’t have the proper skills that employers are seeking.

Here’s what he found. The main problem with the U.S. job market isn’t a gap in basic skills or a shortage of employees with particular skills, but a mismatch between the supply and the demand for certain skills. There’s a greater supply of college graduates than a demand for college graduates in the labor market.

This mismatch, according to Capelli, exists because most jobs in today’s economy don’t require a college degree.

P.S. Added 1/16/2015

Here is another forecast about the future of higher education.

Harden, N. (12/11/2012). The end of the university as we know it. The American Interest. Retrieved 1/16/2015 from http://www.the-american-interest.com/2012/12/11/the-end-of-the-university-as-we-know-it/

Quoting from the article:

In fifty years, if not much sooner, half of the roughly 4,500 colleges and universities now operating in the United States will have ceased to exist. The technology driving this change is already at work, and nothing can stop it. The future looks like this: Access to college-level education will be free for everyone; the residential college campus will become largely obsolete; tens of thousands of professors will lose their jobs; the bachelor’s degree will become increasingly irrelevant; and ten years from now Harvard will enroll ten million students.

Final Remarks

Our precollege and post secondary educational systems have helped make our country great. The expansion model—building more and more campuses, and make many of them really large—has served us well. However, higher education has become more and more expensive both to individual students and to the country as a whole. The financial model for higher education is broken.

Information and Communication Technology has produced disruptive technology that is beginning to greatly change higher education.

  1. An any place, any time, individualized model of teaching and learning is very disruptive to a campus model with its fixed location and time schedules.
  2. Advances in technology have developed a way to make post secondary education much less expensive. The changes that are occurring will benefit some students and institutions more than others. For example, students who cannot learn to learn well in a distance-education environment will be at a disadvantage. Institutions with large endowments and successful research programs will continue to do well.

The two statements given above also apply to precollege education. There, we are beginning to see a significant increase in the use of distance education, and we are also seeing an increasing number of precollege students taking advanced placement and college courses via distance education.

What You Can Do

Those of you who have children considering going to college, or who teach such students, should familiarize yourselves with the idea of return on investment in college education. There are many good jobs that require a job-specific two-year-college education. Others require only a high school diploma. Students should no longer blindly assume that a four-year college degree is “for them” and that it will lead to a high-income career.

References

Drucker, P. (1959). The landmarks of tomorrow. NY: Harper & Row.

Frey, T. (6/5/2013). By 2030 over 50% of colleges will collapse. Futurist Speaker blog. Retrieved 10/21/2014 from http://www.futuristspeaker.com/2013/07/by-2030-over-50-of-colleges-will-collapse/.

Juday, L. (10/2/2014). The demographics of declining college enrollment. StatCh@t. Retrieved 10/26/2014 from http://statchatva.org/2014/10/02/the-demographics-of-declining-college-enrollment/.

Lenzner, R., & and Johnson, S.S. ( 3/10/1997). Seeing things as they really are. Forbes. Retrieved 10/26/2014 from http://www.forbes.com/forbes/1997/0310/5905122a.html.

Raphel, A. (1/24/2014). Are recent college graduates finding good jobs? Journalist’s Resources. Retrieved 10/26/2014 from http://journalistsresource.org/studies/economics/jobs/recent-college-graduates-employment-underemployment#.

Weiner, J. (9/5/2014). Why Sally can’t get a good job with her college degree. Washington Post. Retrieved 10/26/2014 from http://www.washingtonpost.com/blogs/she-the-people/wp/2014/09/05/why-sally-cant-get-a-good-job-with-her-college-degree/.

Weisman, J. (4/15/2014). Small private colleges are in deep trouble (as they should be). MoneyBox: A blog about business and economics. Retrieved 10/26/2014 from http://www.slate.com/blogs/moneybox/2014/04/15/small_private_colleges_are_in_crisis_the_rest_of_us_should_celebrate.html.

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Comments

David Moursund (website) on Tuesday, 28 October 2014 23:00
Research on distance education and other delivery forms

Means, B,. Toyama, Y.,Murphy, R., & Baki, M. The Effectiveness of Online and Blended Learning: A Meta-Analysis of the Empirical Literature. Teachers College Record. Retrieved 10/28/2014 from http://www.tcrecord.org/Content.asp?ContentID=16882.

Quoting from the paper:

Population/Participants/Subjects: The types of learners in the meta-analysis studies were about evenly split between students in college or earlier years of education and learners in graduate programs or professional training. The average learner age in a study ranged from 13 to 44.

Intervention/Program/Practice: The meta-analysis was conducted on 50 effects found in 45 studies contrasting a fully or partially online condition with a fully face-to-face instructional condition. Length of instruction varied across studies and exceeded one month in the majority of them.

Findings/Results: The meta-analysis found that, on average, students in online learning conditions performed modestly better than those receiving face-to-face instruction. The advantage over face-to-face classes was significant in those studies contrasting blended learning with traditional face-to-face instruction but not in those studies contrasting purely online with face-to-face conditions.


In summary, the combination of online plus face-to face (that is, blended) was better than just online, and online was a little better than face-to-face.

Means, B,. Toyama, Y.,Murphy, R., & Baki, M. The Effectiveness of Online and Blended Learning: A Meta-Analysis of the Empirical Literature. Teachers College Record. Retrieved 10/28/2014 from http://www.tcrecord.org/Content.asp?ContentID=16882. Quoting from the paper: [quote]Population/Participants/Subjects: The types of learners in the meta-analysis studies were about evenly split between students in college or earlier years of education and learners in graduate programs or professional training. The average learner age in a study ranged from 13 to 44. Intervention/Program/Practice: The meta-analysis was conducted on 50 effects found in 45 studies contrasting a fully or partially online condition with a fully face-to-face instructional condition. Length of instruction varied across studies and exceeded one month in the majority of them. Findings/Results: The meta-analysis found that, on average, students in online learning conditions performed modestly better than those receiving face-to-face instruction. The advantage over face-to-face classes was significant in those studies contrasting blended learning with traditional face-to-face instruction but not in those studies contrasting purely online with face-to-face conditions.[/quote] In summary, the combination of online plus face-to face (that is, blended) was better than just online, and online was a little better than face-to-face.
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